Australia outlaws golden handshakes, beyond a point

Sydney, March 18 (DPA) Severance payments worth more than a year’s base salary would need shareholder approval under proposed changes outlined Wednesday by Australian officials. “The community has been rightly offended by the excessive golden handshakes in firms where directors and executives are rewarded for poor company performance,” Treasurer Wayne Swan said.

“The government’s reforms will empower shareholders to more easily reject such payments where they are not in the interests of the company, the shareholders or the community,” he said.

Under current law, there is no need for shareholder approval until a termination payment is valued at more than seven times a base salary.

The move came after US President Barack Obama pledged to claw back millions of dollars in performance bonuses paid to executives of American International Group Inc after the insurance company received a taxpayer bail-out of $180 billion.

Australian Shareholders Association head Helen Dent welcomed the move, saying it was “definitely a step in the right direction”.

She said a survey in February found 90 percent of 1,611 respondents believed executives of listed companies received excessive pay.

Dent said it simply wasn’t true that lots of senior executives would leave their employers and work overseas unless they were paid huge bonuses.